I recently had the chance to tour the Orbea USA assembly facility with their Chief Operating Officer. I asked him about Orbea’s distribution strategy of using only retailers. After all, competitive cyclists tend to be pretty “wired” and know what they want, so why not sell directly through the Orbea website? He said they sell through retailers since there is some customization done at the dealer and to protect their premium product positioning.
I also visited an Orbea retailer. I asked the sales guy (who obviously was a cyclist) about Orbea bikes, and he launched into a passionate rant about why they’re the best and how he wouldn’t be caught dead riding anything less.
The Orbea strategy is a great example of why manufacturers must stay true to their distribution channels, especially in recessionary times:
- Brand loyalty is not just for the end user. It extends to your channel. Protecting them builds goodwill that carries you through tough times
- Short term margin gains (e.g., selling through the Internet) comes with a long term cost of diminishing your brand in the eyes of the end user and losing your channel’s loyalty
Orbea is taking the long view of meeting the needs of a very specific segment of the riding population. Their customers, and their channels, are in turn rewarding this strategy with fierce loyalty.
1 comment:
An interesting and very real case in point of the importance of appreciating where the brand is created and managed. Failing to nurture such an advocate is at best, a missed opportunity, at worst the loss of your best sales person if their loyalty was ultimately 'poached' - and don't dare think it couldn't be given time. Whether you sell direct, through a network or a combination, the management of information across those and the use of relevant sales tools etc. is key. While some products succeed because of a 'killer' aspect to them e.g. Sony with their Walkman (the product itself), most of us have reach our goals through making sure we address all parts of the 4P's of the product mix; that includes 'place'! Finally, perhaps there should be an unofficial 5th 'P' standing for Prioritise. We must think wide and far, we must ensure we don't leave any gaps in our thinking or plans, but a failure to focus will probably result in failure overall.
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